Bond Yields Surge as Energy Prices Climb

Global bond yields have surged across maturities as investors assess higher energy prices, inflation risks, and the prospect of tighter monetary policy. Short-term U.S. and euro zone yields have risen to multi-year highs, while 30-year yields in major markets are hovering around levels not seen in over a decade.

The U.S. Treasury is preparing to at least double its longer-dated bond buybacks, with the first operation scheduled for Wednesday. Despite the sharp moves, the selloff has remained orderly so far.

Japan's 10-year government bond yield climbed above 3% for the first time in three decades, making it a key focus for global bond markets. Investors are watching whether Japan's $2 trillion Government Pension Investment Fund will increase allocations to domestic bonds, potentially reducing its exposure to overseas debt and equities.

The European Central Bank is widely expected to raise interest rates by another 25 basis points on Thursday, matching its June move. The key question for investors will be what comes next as inflation moves back above 3% and energy prices rise amid geopolitical tensions.